Some 88% of private-label suppliers are optimistic that its penetration will continue to grow in the retail sector, with 15% saying that they are "very optimistic" about the future growth of the sector.
That's according to a survey of 567 suppliers from close to 40 countries, carried out by the Private Label Manufacturers' Association (PLMA) and presented at the PLMA International Roundtable, which took place in Dublin, Ireland, last month.
When asked how manufacturers believe that retailers view private-label suppliers, some 45% said that retailers see them as a "necessity" if they want to market private label, while a similar percentage (45%) said, "We have contributed a lot to their growth in recent years."
Some 43% of respondents said that they believe that manufacturers help retailers to be "more competitive" in the private-label marketplace, while 42% said that they believe that private-label manufacturers are "just as professional as A-brand suppliers".
Just under a third (32%) said that they believe that private-label manufactures are "easier to deal with" than A-brand suppliers.
Challenges To Growth
When asked about the challenges that private-label manufacturers see in the marketplace, 44% cited the need to provide consistent product quality, while 39% cited competition from other suppliers in Europe.
A third (33%) cited the consolidation or private-label suppliers as potentially impacting growth, while 22% cited the rise of the discounters and 21% the rise of online retailers and websites.
The nature of retailer-manufacturer partnerships was also examined. While 46% of respondents said that retailers are more willing to work with private-label manufacturers as partners, 28% responded that retailers have become "less like partners" and 25% said that retailers have become "less understanding of their company's needs".
In addition, 19% of respondents said that retailers are now "more focused" on A-brands than they were before.
Product Innovation
The survey also examined the driving factors behind product innovation, with 32% of respondents saying that they felt innovation was "very important" to consumers and 42% considering it "important".
With this in mind, 37% of respondents said that they believed A-brand manufacturers do a "better job" at product innovation, compared to private-label suppliers.
Some 23% said that they believed the opposite was the case: that private-label manufacturers are better at product innovation than A-brands. Just over one in ten (11%) said that they felt that retailers do a better job at product innovation than private-label suppliers.
The PLMA International 'World of Private Label' trade show takes place in Amsterdam on 29 and 30 May 2018.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
